Meta in talks to acquire 49% stake in Scale AI for $14.8B: Report
The deal will value Scale AI at $28 billion, including Meta's fresh investment, doubling its valuation from $13.8 billion just last year.
Meta Platforms is planning to acquire a 49% stake in Scale AI for $14.8 billion, according to a report by The Information on Tuesday.
The deal, yet to be finalised, will see Meta’s cash investment go directly to Scale’s existing shareholders, the report said.
It added that as part of the agreement, the 28-year-old CEO of Scale AI, Alexandr Wang, is expected to take a senior leadership position within Meta. The transaction marks a windfall for Scale’s early backers, including Accel, Index Ventures, Founders Fund, and Greenoaks Capital, as well as current and former employees.
The firm will continue to operate independently, with shareholders retaining their current stakes. The deal will value the company at $28 billion, including the Mark Zuckerberg-led firm’s fresh investment, doubling its valuation from $13.8 billion just last year.
As part of the deal, Wang will reportedly lead a new “superintelligence” lab, along with other top Scale AI’s senior technical employees, according to recent reports by The New York Times and Bloomberg.
The report added that Jason Droege, a former Uber Eats executive who joined Scale AI as chief strategy officer, is in talks to take over as CEO of Scale AI.
However, the deal raises questions about the future of Scale AI’s customer relationships. According to media reports, one of its largest clients is . The company has also previously named , , , and as its key customers, many of whom now compete directly with Meta in the race to build advanced AI systems.
The agreement also marks a major shift in Meta’s AI strategy, positioning the company to compete more directly with leading AI labs, such as OpenAI.
In January, Meta CEO Mark Zuckerberg announced that the tech giant would invest up to $65 billion in AI-related initiatives this year, making it one of Meta’s top priorities.
Scale AI also built Defense Llama, a large language model designed for military use, on top of Meta’s Llama 3.
Founded in 2016 by Wang, Scale AI clocked $870 million in revenue last year and expects sales to more than double to $2 billion this year.
As the AI race intensifies, larger tech firms are fueling investments in companies advancing AI capabilities. Last month, ChatGPT-maker OpenAI acquired io Products, the AI hardware startup co-founded by former Apple design chief Jony Ive and OpenAI CEO Sam Altman, in a $6.4 billion all-equity deal.
The acquisition is by far OpenAI’s largest to date and signals the AI firm's entry into the AI-enabled consumer hardware market. It already owns 23% of io Products and is paying $5 billion for the remaining stake in the company.
Edited by Suman Singh